IB Business Management
Unit 2.4 Human resource management (HL)
Motivation & demotivation theories (HL)
Theory #1 McClelland
McClelland’s motivational theory revolves around three core needs that drive human motivation. These needs are where motivation often equates to lower costs, higher productivity and a greater chance of organizational sustainability
Why it useful?
Why useful? managers adopt tailored strategies to motivate employees effectively, such as assigning tasks based on an individual’s dominant motivational need.
Organizational Culture: Employing people who will fit the organizational culture can help create a harmonious culture – although it must be acknowledged that different roles will require or naturally attract certain traits (sales for example often favours extroverted and somewhat aggressive individuals)
Leadership Styles: Experienced managers can manage individuals according to their natural inclination (Naff, NPow, Nach). By recognizing natural individual differences in workers, managers can adopt their style to individuals to help get the greatest contribution from each employee
#1 Need for Achievement (nAch)
Definition: This need represents an individual’s desire to accomplish challenging goals, excel, and seek personal achievement.
Key Characteristics: Individuals with a high need for achievement prefer tasks that are moderately challenging (neither too easy nor impossible). They thrive on personal responsibility and seek feedback on their performance. Such individuals often set high standards and are self-driven.
Application in Business: Employees with a high nAch are suited for roles requiring innovation, problem-solving, and leadership. Managers can motivate them by offering challenging projects and opportunities for growth.
#2 Need for Affiliation (nAff)
Definition: This need reflects a desire for friendly relationships, belonging, and acceptance in a group (affiliation).
Key Characteristics: Individuals with a high nAff prioritize collaboration and value interpersonal relationship. They avoid conflict and seek harmony within teams.
Application in Business: These individuals thrive in team settings and roles involving customer relations or group-based projects. Managers can motivate them by fostering a positive and inclusive workplace culture.
#3 Need for Power (nPow)
Definition: This need is about the desire to influence or control others and make an impact.
Key Characteristics: Individuals with a high nPow seek leadership roles and enjoy recognition for their authority.
They can be either personal power-oriented (focused on control for self-benefit) or institutional power-oriented (focused on achieving organizational goals).
Application in Business: People with a high nPow excel in leadership and management positions. Managers can motivate them by giving them authority, responsibility, and opportunities to lead initiatives.
Questions: Theory #1 McClelland
- Examining the two personal statements below, decide which candidate you would hire as a sales rep for a software company. Explain your reasoning with a link to McClellands theory of Naff, Nach and Npow
- Explain two reasons why individuals with a high Npow may be unsuitable for work in a social enterprise or cooperative business structure
- Which single or pair of attributes (from Naff, Npow and Nach) are most desirable when selecting a young university graduate for a fast-track program that ends with a management position?
Personal Statement 1:
“I thrive on setting and achieving challenging goals while fostering positive relationships within a team. With a proven ability to take personal responsibility and deliver results, I value collaboration, feedback, and innovation. I aim to excel in environments that reward both individual performance and group harmony.”
Personal Statement 2:
“My drive to lead and influence others has shaped my career ambitions. I excel in roles where I can assert authority, implement strategies, and guide teams toward success. I value recognition for leadership and am motivated by opportunities to control processes and deliver measurable impact for the organization.”
Theory #2 Deci and Ryan
Deci and Ryan’s Self-Determination Theory (SDT), focuses on intrinsic and extrinsic motivation. It emphasizes that individuals are motivated when their three core psychological needs are met
Autonomy: The need to feel in control of one’s actions and decisions. Employees are more motivated when they have independence and choice in how they complete their tasks.
Competence: The need to feel capable and skilled at what they do. Achieving mastery and receiving constructive feedback fosters motivation.
Relatedness: The need to connect with others and feel a sense of belonging. Strong interpersonal relationships enhance commitment and satisfaction.
Does it hold?
Key Insight: SDT suggests that intrinsic motivation (driven by internal satisfaction) is more effective and sustainable than extrinsic motivation (rewards or punishments), making it vital for fostering long-term employee engagement and performance.
Does it hold?
There is an agreement of sorts between Maslow’s hierarchy of needs, but a contradiction in certain popular roles and jobs. For example, top graduates annually seek the highest paid jobs
in the City of London. Typically, these jobs involve investment banking in which the conditions are well understood to be challenging (if not outright discouraging). In this sense, these roles do not correspond particularly well as these roles often attract candidates who are motivated by money (extrinsic factors).
However, a more sophisticated analysis of this could argue that money is indeed a ‘need’ given the incredible
costs of living, house prices and the lingering question of, ‘how much money will I need’?
QUESTIONS: Theory #2 Deci and Ryan
- Which management style could promote the greatest sense of autonomy for workers in their roles?
- Comment on whether you think excessive managerial control demotivate employees despite other incentives.
- Comment on whether a business should continue employing somebody who has a lack of competence in their job
- How does workplace culture influence employees’ sense of belonging?
- Suggest how might Deci and Ryan’s theory help managers improve workplace satisfaction?
- To what extent should organizations prioritize intrinsic motivation over extrinsic rewards?
Theory #3 Equity and expectancy theory
Workers naturally compare their efforts or rewards to those of others in the workplace. Each worker should receive remuneration package that reflects their efforts. The degree of quity (perceived fairness) in a workplace is based on the ratio of inputs to outputs!
“workers will only be motivated if their input to output ratio is deemed to be equitable (fair) in relation to that of others in the workplace”
Inputs can be physical or intellectual. Outputs can be both physical or intangible! John Stacey Adams suggested that the ‘degree of equity’ can affect motivation in three different ways:
1.) Equity norm – Workers expect equitable remuneration – and so businesses should strive to provide this perceived equity!
2.) Social comparison – Workers determine ‘fair’ based on workplace comparisons!
3.) Cognitive distortion – Workers who feel under-compensated become demotivated and may withdraw goodwill!
Problems of Equity and expectancy
- Companies are not set up to be quitable – they are established for profit!
- Social enterprises may correct this idea slightly
- Different roles within the same business tend to pay more or less (not according to equity) but according to supply and demand for those roles!
- Physical effort is commonly ‘undervalued’ despite its toughness
- An idea may be worth millions and take very little ‘perceived effort’ to generate!
- Rewards at work are often showered disproportionately on those that are educated – compared to those that are not!
- Workplaces are not always (not often) meritocratic!
- Perceived fairness is subjective!
- Workflows are typically not constant – which creates pinch points throughout the year in which some staff may be completely overworked for no extra pay!
QUESTIONS: Theory #3 Equity and expectancy theory
- If a manager decides to reward only the top-performing team members, what potential equity issues might arise among the rest of the team?
- Are there circumstances where perceived inequity can be justified in the workplace? Provide examples.
- In what roles or jobs are there most likely to be significant resentment based around perceived inequity of remuneration?
APPLYING MOTIVATIONAL THEORIES TASK
Designing a Motivational Salary Package for Two Different Companies
Task: Creating a performance-based salary package for employees at Company A and Company B. You must take into account different motivational theories and tailor the salary and reward packages to fit the needs of different employees within the same company!
Company A: A prestigious investment bank that pays high salaries, offering large six figure bonuses to traders, while offering more modest pay for administrative staff.
Company B: A small, local furniture manufacturing company that pays lower wages but has the potential for piecework-based earnings, which vary based on output.
Instructions:
Part 1: Motivational Salary Packages (Monetary and Non-Monetary)
For both companies, design a salary package that is motivating for different categories of workers (e.g., high-performing traders, administrative staff, pieceworkers, etc.). Your salary packages should reflect the different HL motivational theories (McClelland’s Theory of Needs, Ryan & Deci’s Self-Determination Theory, and Expectancy Theory)
Part 2: Motivational Strategies
Explain why your chosen salary package will effectively motivate employees in each role.
Consider the following:
What needs or drivers are most important for each type of employee (e.g., achievement for traders, affiliation for admin staff)?
How does your package meet the employees’ intrinsic and extrinsic motivations (Ryan & Deci)?
How does your package incorporate elements of Equity Theory (i.e., fairness in reward allocation) and Expectancy Theory (i.e., clear link between effort, performance, and reward)?
Part 3: Differentiating Rewards for Different Roles
Within each company, identify how the rewards and incentives should differ for various roles.
Explain how the motivations for each group vary and how your compensation model addresses this.
Motivated or unmotivated. A day in the life case study
Case Study: Company A’s Workplace Environment
At Company A, the atmosphere is heavy with indifference. Employees arrive late, some barely making it before the second warning bell, while others call in sick so often that schedules are in constant disarray. The staff turnover rate has reached alarming levels, with new hires lasting only weeks before leaving without notice. Exit interviews, when conducted, reveal vague complaints about “the work culture” or “lack of opportunities,” but few employees bother to provide details.
On the production floor, efficiency is at an all-time low. Machines frequently stand idle as workers seem distracted, moving sluggishly through their tasks. Defective products pile up, leading to a surge in customer complaints, but no one appears concerned. Supervisors attempt to implement quality control measures, yet staff members dismiss feedback with shrugs or sighs.
In the break room, once a hub of chatter and camaraderie, silence reigns. The walls are adorned with outdated posters from long-forgotten initiatives, and the employee of the month board has gathered dust. Meetings are lifeless affairs—suggestions are rare, and discussions are met with blank stares. Even management seems resigned, offering forced smiles and uninspired pep talks.
Despite several higher-paying management positions being available, internal applications remain nonexistent. When asked why they won’t apply, employees mutter, “Not worth it,” or simply laugh.
Case Study: Zenith Architects Workplace Environmen
At Zenith Architects, the office hums with quiet energy. Employees arrive early, coffee in hand, engaged in animated discussions about their latest projects. Even as deadlines loom, there’s a sense of calm efficiency—everyone knows their role, and teamwork is seamless. Junior architects eagerly seek feedback from senior colleagues, sketching out ideas on shared whiteboards, while the design team refines client presentations with meticulous attention to detail.
The workspace itself reflects the company’s culture: desks are cluttered not with neglected paperwork but with vibrant concept models and material samples. The break area is alive with conversation, where colleagues swap creative ideas over lunch. The employee recognition board is regularly updated, celebrating design awards, successful client pitches, and individual contributions.
Every Friday, the team gathers for a collaborative review, sharing insights and celebrating progress. When new management roles open up, multiple internal candidates apply, excited by the prospect of greater responsibility. Even those in senior positions remain engaged, mentoring younger staff and championing innovative design trends. Job satisfaction surveys consistently reflect high engagement, and clients frequently praise the firm’s creative energy and professionalism.
Questions: Motivated or unmotivated case study
- List the factors from company A’s report that suggest evidence of demotivation! [6]
- Suggest two methods that are inexpensive that could be used to address the problems at Company A [4]
- List the factors from Zenith Architects that suggest evidence of highly motivated employees!
- Analyse (from a management perspective) how it is possible to maintain this level of motivation within a company [6]